Halloween pop-up stores are taking over area shopping centers

Right around Labor Day they start appearing. They devour empty space at strip malls, grabbing attention with ghoulish displays. They are Halloween pop-up stores, and they have become a seasonal fixture.

There are at least 26 of these outlets in the Washington area, including Spirit Halloween, Halloween Adventure, Halloween City and Halloween Express. They sell costumes, accessories and props for little more than two months a year. With such a short time-frame to run a business, it’s a wonder Halloween pop-ups turn a profit.

It all comes down to having “precise operations,” said Steven Silverstein, chief executive of Spirit Halloween, owned by Spencer Gifts. In its 28 years, the Egg Harbor Township, N.J.-based company has fine-tuned a standard approach for site selection and amassing inventory. It has 970 stores open across the country this year, staffed with some 20,000 seasonal workers.

“It’s a year-round effort in order to execute a two-month event,” Silverstein said. “We generally look at three to four times the amount of space we actually end up taking.”

Spirit’s seven-member real estate team heads out after Halloween to scout sites between 8,000 and 15,000 square feet in high-traffic areas for the following year. The company, which has year-round online operations, often returns to past locations, if they are available.

Costumes are selected by a team of 14 buyers, who keep an eye on pop culture trends to gauge which get-ups might be in demand for the holiday. (Silverstein said pop singers Lady Gaga and Katy Perry are hot tickets this year.) Spirit’s warehouses are stocked with classic costumes — vampires, witches and fairies— that are always en vogue, making ordering easier and keeping inventory at roughly the same level each year.

That’s about the same strategy Halloween Express uses to roll out its stores, said chief operating officer Holly Bowling. The Owenton, Ky.-based company said it has recorded 10 percent sales growth so far this season, with 200 locations across the country, including one in Rockville. Halloween Express franchises its locations, leaving the real estate hunt up to the individual owners.

“This year has been pretty easy to find good locations,” Bowling said. The demise of Circuit City and Linens ’n Things, she added, has offered a broader selection of space in recent years, as has the recent closures of Borders bookstores. “We’ve gotten several of the Borders as they closed, even though they came on the market late in the season.”

Neither Silverstein nor Bowling would discuss how much they pay to lease space. Area brokers familiar with seasonal leases say Halloween pop-ups can pay anywhere from $12,000 to $20,000 for a 60-day period.

“They pay a moderate amount of money to basically cover the utilities,” said broker Jim Farrell of the Rappaport Cos., who has worked on pop-up deals in the past. “They give landlords insurance certificates to cover any liability and do a minor amount of retrofitting.”

A recent National Retail Federation survey found Halloween revelers expect to spend an average $72.31 on decorations, costumes and candy this year, up from $66.28. The trade groups expects Halloween spending will top $6.8 billion this year.

Silverstein said he hopes to carve out a chunk of that revenue. He declined to discuss Spirit’s sales, preferring to judge the company’s success by its store growth. Spirit, he pointed out, has added 100 stores a year since he came on board in 2006.